January 8, 2003

Washington, DC (January 8, 2003) - Small businesses would be harmed if proposed telephone network leasing rules now under consideration at the Federal Communications Commission (FCC) are adopted, the Small Business Survival Committee (SBSC) said today.

"Small business owners, along with consumers, have benefited from local telephone competition through lower prices and better service," said Karen Kerrigan, founder and chairman of the Small Business Survival Committee.  "Many, if not all, of those benefits could disappear overnight if the FCC implements the changes recently reported in the media."

Citing FCC sources, numerous publications have reported that the FCC plans to drastically alter the leasing rules known as the Unbundled Network Element-Platform (UNE-P) under which competitive local telephone companies pay to use parts of the incumbent companies' networks to serve customers.  

"The unbundled network element platform has kick-started local phone competition in a number of states," Kerrigan said.   "But if the FCC eliminates parts of the platform or ties states' hands in setting reasonable rates, competition could rapidly disappear and force small businesses back into the hands of the dominant local phone companies.  Such a re-monopolization of local phone service would lead to higher rates and lower quality service."

Kerrigan noted that more than 10 million consumers and small businesses now have a competitive choice for their local phone service, where previously their only option was the local incumbent phone company.

"If the FCC goes forward with its planned changes to gut UNE-P, I believe that Chairman Michael Powell and his fellow commissioners owe an explanation to each of those 10 million telephone customers and the small businesses that have benefited - both as consumers and competitors - under deregulation," Kerrigan said.